Photo Credit: Mike Mozart
GameStop Corp.(GME) Consumer Discretionary – Specialty Retail | Reports March 24, After Market Closes
Key Takeaways
GameStop, the one stop shop for all things video games, is scheduled to report fourth quarter earnings today, after the market closes. The Estimize consensus is calling for EPS of $2.26 and revenue of $3.56 billion, 1 cent higher on the bottom line and right in line on the top line. However, the Select Consensus is expecting $12 million less on the top line. The crowdsourced community has been been bearish on Gamestop, revising both EPS and revenue estimates down 6% in the past 3 months. Compared with the previous year, this predicts earnings growth of 5%, while sales are looking to grow by 3%. Historically, the video game retailer has consistently beat expectations, trumping Estimize in 69% and Wall Street in 76% of recorded quarters.
Despite a weak holiday shopping season, Gamestop is hoping year-end sales can give fourth quarter results a much needed lift. Shares received a nice boost last week after management indicated that the company is on pace to beat its fiscal 2015 guidance. However, this hasn’t been enough to reconcile the 28% decline in the stock price over the past 6 months. Gamestop is coming off of a disappointing third quarter with total sales decreasing 3.6%, reflecting a decline in every key segment; next generation hardware fell 20.4%, new software sales declined 9.3% and global comp sales shrank 1.1%. A majority of the contraction was attributed to currency headwinds which cost Gamestop $100 million in sales and 2 cents in earnings per share.
